What is multicollinearity? In general, how would you know if you had a problem with multicollinearity, and how could you correct it?
What will be an ideal response?
Multicollinearity occurs when the independent variables are correlated. One indication of multicollinearity is that the equation will pass the F-test, but individual variables will not have significant t values. Multicollinearity can sometimes be corrected by omitting some of the correlated variables or by choosing proxy variable.
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An increase in aggregate demand tends to cause a ____ a short run Phillips curve at first, then cause a ____ in the short run Phillips curve as people adjust their expectations. a. Movement up along; upward shift
b. Movement up along; downward shift. c. Movement down along; upward shift. d. Movement down along; downward shift.
Two months ago, the Maryville Shirt company sold 2000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3000 shirts. Evidently the company experienced a(n):
A. Decrease in demand B. Increase in demand C. Decrease in supply D. Increase in supply